IMPACT OF ORGANISED RETAILING ON TRADITIONAL RETAILERS

ORGANIZED RETAILING •Modern retailing with busy shopping malls• •Multi storied malls

•Huge complexes

• They offer a large variety of products in terms of quality, value for money and makes shopping a memorable experience.

TRADITIONAL OR UNORGANISED RETAILING • street markets,

•counter stores,

• kiosks and vendors, where the ownership and management rest with one person only. This sector accounts for two thirds of the market and requires low skilled labor. These are highly competitive outlets, with negligible rental costs (unregistered kiosks or traditional property), cheap workers (work is shared by members of family) and low taxes and overheads.

ORGANIZED VS UNORGANIZED RETAIL

In the developed economies, organized retail is in the range of 75-80 per cent of total retail, whereas in developing economies, the unorganized sector dominates the retail business. The share of organized retail varies widely from just 1 per cent in Pakistan and 4 per cent in India to 36 per cent in Brazil and 55 per cent in Malaysia

Modern retail formats, such as hypermarkets, superstores, supermarkets, discount and convenience stores are widely present in the developed world, whereas such forms of retail outlets have only just begun to spread to developing countries in recent years. In developing countries, the retailing business continues to be dominated by family-run neighborhood shops and open markets

STRENGTHS OF ORGANISED RETAIL SECTOR

•EXTENSIVE USE OF TECHNOLOGY

•BETTER UTILISATION OF RESOURCES

•USE OF MANAGEMENT INFORMATION SYSTEM FOR SYSTAMATIC ALLOCATION OF RESOURCES

•REGULATIONS OF USING SIMMILAR TYPE OF STRUCTURE ie-FORMAT RETAIL STORES LIKE SUPER MARKETS ,HYPERMARKETS,SPECIALITY STORES ECT

•ENHANCES WELFARE GAINS TO THE CONSUMERS

•IMPACT ON GROWTH &PRODUCTIVITY

•DIRECT LINK TO AGRICULTURE OR MANUFACTURE SAVING COST •IMPROVEMENT OF GOVT REVENUES

WEAKNESS OF UNORGANISED RETAIL SECTOR

•FRAGMENTED

•UNSYSTEMATIC

• LACK OF SOCIAL SECURITY FOR LABOUR WELFARE

•MAXIMUM LABOUR TURNOVER

•LACK OF LATEST TRENDS

UNFAVORABLE IMPACT OF ORGANISED RETAIL ON UNORGANIESD RETAIL SECTORUnorganized retailers in the vicinity of organized retailers experienced a decline in their volume of business and profit in the initial years after the entry of large organized retailers The adverse impact on sales and profit weakens over timeThere is competitive response from traditional retailers through improvedbusiness practices and technology up gradation.

FAVORABLE IMPACT OF ORGANIZED RETAILING ON TRADITIONAL RETAIL Exposure of organized sector Striving for growth

Entering into New ventures

Trying to upgrade through new technology

•Overall share of organized retailing remains low,• Its share in certain categories is relatively high and in certain other categories quite low.Example –low share of organized sectors-un stiched clothes including sarees ,ethnic clothings ,sweet shops ,food grocery High share –Almost all multinational brands of different items as man’s wears Kids wears

•Globalization of Retail sector